Deterring gaming with imperfect evaluation methods
This paper introduces and discusses an idea which minimizes gaming or manipulation activities, if payments are linked to results from manipulative methods. The idea is to add nonmanipulable information to manipulable information to improve the evaluation of a given output. A score declining in increasing evaluation quality indicates gaming and allows to estimate the true result. A simple linear incentive scheme is introduced in which a high evaluation score is rewarded. The introduced mechanism dominates any single evaluation method. However, limited liability restricts its applicability. If agents are risk-averse, the principal should let each agent decide, which evaluation method he prefers.
|Date of creation:||26 Jan 2006|
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